Monday, November 09, 2015

Case-Deaton and the human capital debate

Everyone is talking about the Case-Deaton paper that shows an increase in mortality among American white people. Most people have noted that the increase is concentrated among less-educated whites. Here is the relevant excerpt from the paper:

The three numbered rows of Table 1 show that the turnaround in mortality for white non-Hispanics was driven primarily by increasing death rates for those with a high school degree or less. All-cause mortality for this group increased by 134 per 100,000 between 1999 and 2013. Those with college education less than a BA saw little change in all-cause mortality over this period; those with a BA or more education saw death rates fall by 57 per 100,000. Although all three educational groups saw increases in mortality from suicide and poisonings, and an overall increase in external cause mortality, increases were largest for those with the least education...

The final two rows of the table show increasing educational gradients from 1999 and 2013; the ratio of midlife all-cause mortality of the lowest to the highest educational group rose from 2.6 in 1999 to 4.1 in 2013.

And here is the table:

This paper provides some hard data to corroborate a story we have been seeing elsewhere: College-educated Americans are significantly healthier in their personal, family, and social lives. To me this indicates that education has acted to partially innoculate Americans against the overall negative changes that are affecting our society.

This is interesting for the debate on whether education - particularly college - creates human capital or not. Evidence is mounting that college transforms people's lives in ways that are not directly related to natural ability. I suspect that more detailed regressions would find that the difference in social and personal health persists after controlling for income, SAT scores, etc.

Here is an NBER paper by David Cutler and Adriana Lleras-Muney that supports my conjecture. I didn't find any other good-looking recent papers on the topic with a quick Google Scholar search. From the abstract:

There is a large and persistent association between education and health...The education ‘gradient’ is found for both health behaviors and health status, though the former does not fully explain the latter. The effect of education increases with increasing years of education, with no evidence of a sheepskin effect. Nor are there differences between blacks and whites, or men and women...We then consider differing reasons why education might be related to health. The obvious economic explanations – education is related to income or occupational choice – explain only a part of the education effect. We suggest that increasing levels of education lead to different thinking and decision-making patterns. The monetary value of the return to education in terms of health is perhaps half of the return to education on earnings[.]

The Cutler and Lleras-Muney paper also reviews some natural-experiment studies indicating that the effect is causal for pre-college education (though here's one paper they didn't cite, showing no effect). The authors also attempt to control for a large number of personal characteristics that might cause people to be both healthier and more likely to go to college, but find that this only marginally attenuates the relationship. They conclude that it is highly likely that the effect of education on health is, in fact, causal. (If they're right, that's in addition to whatever effect college has on income.)

A tendency toward healthy behavior is a powerful and important form of human capital. It is not at all clear that this kind of human capital can (or will) be created by MOOCs, self-study, or other forms of online learning that are being touted as replacements for college. In fact, right now it looks like the health-related human capital boost from college is all that is holding it together for our upper middle class.

27 comments:

A college education is so much more than what goes on in class. It's about being inspired (or not) by people around you, fitting into social circles, meeting people who can serve as connections your entire life, learning to schedule, learning how much downtime one can tolerate and still get tasks accomplished. I'd argue the material learned in class is 20% or less of the full effect of the college experience, but I think someone should do a comprehensive look at what college means. Much of success in life has to do with social skills, and MOOCs etc arguably don't bring much to the table there.

My guess is home life during one's upbringing (parents helping with homework, encouraging involvement in extra-curricular events, making a child feel loved) is far more important here than whether or not an individual goes to college. It just so happens people who are brought up in a "positive environment" also end up going to college.

Having worked for years with both high school and college students, I believe the differences become apparent well before college starts. Students who are successful enough in high school to make completing some or all of the years at university possible are typically more persistent, better at delaying gratification, more resistant to discouragement, better at making informed decisions, better at staying focused on goals and harder working than their peers who never attend college.

These abilities would also help individuals have more successful, stable, emotionally and physically healthy lives post-university, I expect.

College may just be a giant selection device for the traits that would tend to lead to successful lives even if colleges had never existed.

I agree with this. Some percentage of people who decide to wait to go to college after HS and/or end up not going at all may be displaying poor decision-making in other areas of their life, assuming they're not doing it because they are driven to succeed in some other career that doesn't require college.

There is one thing I have noticed among people with only a HS education--anti-intellectualism. It's a bit of a generalization, but it does seem to be common. I work in an office full of people with only a HS education and have many friends who never attended college. The one fairly common theme is how stubborn they are when it comes to learning or experiencing something outside of their comfort zone or clique. Most of them just want to punch a clock like proud little worker bees and hang out with the same people, watch the same shows, and do the same thing, over and over. This is true among all people I know in this education level, with the exception of 1 or 2. They seem to have an animosity towards learning anything new, reading books, having a new experience, or thinking critically versus just being a reactionary. For many years I rejected this caricature, but the older I get the harder it is for me to not seriously consider it.

It's unfortunate, but the economy seems to punish that type of mentality these days. I remember reading something about the difference between poor children and rich children. Rich children were encouraged to inquire about something and ask questions, whereas poor children were not. Can't remember where I read it. Someone else know it?

As an long-time autodidact (who came to self-study out of necessity rather than choice, but definitely jumped on the autodidact bandwagon after reading Taleb) who has just gone back to college, I honestly feel that formal college is better, particularly for learning technical subjects.

There's an excellent reason why you don't see 50 or 55 year old roustabouts, carpet layers, bricklayers or pool tilers. Their bodies simply can't take more than a couple of decades or so of that kind of work. With no pensions, no savings, no additional or transferable job skills, and bodies that are wearing out many years before social security kicks in, these men logically turn to prescription opioids to eke out a few more years of income. Eventually, the inevitable happens - they physically break down, probably in worse shape than before they started on painkillers, and some discover that these are the new gateway drugs to heroin.

Years ago, in the 40's to 70's, these men would have worked in factories, protected by unions at rates of pay that allowed them to buy a home, educate their kids and build some savings. My parents had men like this as their neighbors and friends, When repetitive motion injuries or age-related disability occurred they were offered light duties that they could do until they aged into their pensions. Now? No factories, no unions, no light duties, no pensions. Suicide or oblivion via drugs and alcohol may be a completely rational response to an unbearable situation.

We have seen this before - in Russia in the early 90's, following the end of the communist system. A significant portion of the population of older middle aged men committed suicide and drank themselves to death over the course of a decade or so. It was probably also a rational response to the unilateral violation of a social contract that had once make life liveable.

See the chart at http://www.bbc.com/news/health-25961063. The shape of the curve before and after the collapse of the Soviet Union is way way too similar to the chart that portrays the Case Deagan data.

This explanation is a bit male-centric. Look at Gelman's most recent posts. The trend is actually worse among women than men. Of course blue-collar women also can have job-related injuries, but I think there's more going on here. I think it has more to do with mental/emotional health than physical health. Why are middle-aged, blue-collar whites depressed? One place to look is the breakdown of social networks. Higher-income people can find social networks through their children's (expensive) after-school activities. They also attend church at higher rates than lower-income whites. Hispanics also tend to attend church at higher rates, which may be part of the explanation there.

It is funny to see how the privileged upper class in this country immediately thinks about these kind of issues in term of personal behavior failure. The "mindfulness and happiness as a personal choice" worm has eaten too many brains.

An interesting book to read on this topic is Lubrano's Limbo: Blue Collar Roots, White Collar Dreams. Lubrano grew up in a blue collar family but moved into a white collar world. Despite his success, he still felt an outsider.

One telling passage recounts his father, who worked as a bricklayer working for the city in NYC, who decided that he needed a promotion as he moved into his 50s. The physical demands of the work were just to much for him. To move up, he had to pass a civil service exam, one that tested his ability to read and write. Lubrano, born with a blue collar, was confused by this, but it makes perfect sense to one born with a white collar. If his father was to manage other bricklayers, he needed to be able to read specifications and regulations. He needed to be able to issue written instructions, explain cost and time estimates, document personnel decisions and so on. Those are language and logic skills, quite different from the skills that align the bricks in a wall or plaza.

Even if you don't read the book, read the Amazon comments. For a white collar child of white collar parents (both NYC civil servants) it was enlightening. Lubrano is writing about people born in the tribe that is taking modern times on the chin but who have now moved on. It is most interesting to see what they have left behind. It is an entire other world and possibly a dying one.

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I also loved his phrase "island girls" referring to the white collar women he dated, women who grew up in homes with kitchens with central islands, something unheard of in his native land.

I guess there is a lot of that "proud of being ignorant" feeling, which is also being cultivated by the GOP in there - that's why the situation is worse for whites than for hispanics, the GOP doesn't reach them as much. There are people who, when faced with news about climate change, burn fuel in protest. Who, when there's another mass shooting, buy another gun and let their children play with it. And when they hear about Michele Obama promoting a healthy diet, they eat another supersized meal.

The rush to spin the Deaton-Case paper into support for any number of pre-existing hypotheses has been fascinating to watch. The truth of the matter is here, as with any novel data pattern, it will take years of careful study by lots of different people using lots of different approaches to figure out what is actually going on in these data, and what that actually has to do with things going on in the real world. And in all likelihood, the story will be messy and multi-layered, and won't conform to anyone's pre-existing narrative.

What is probably more significant than Gelmans observations that the statistics are screwed because the population profile in the 45-54 range has shifted in the intervening time is that in every other country it has dropped significantly in some cases almost by half, and that US is now one of the worst - e.g. you are twice as likely to die in the US than in Sweden for this subpopulation

Still overlooked is the fact black non-Hispanics morality rate decreased at a rate of 2.6% per year vs the 1.8% for Hispanics... given the difference in educational attainment I suspect that HS educated whites are doing worse than HS educated blacks strictly in terms of morality... that's some true despair

Notice the pic accompanying this article shows a Asian man marrying a Caucasian woman. This is very rare (more common is older Caucasian like myself marrying an Asian girl, like I'm about to, and she's gorgeous and less than half my age here in the Philippines). The man in the photo, if it's genuine, is probably rich to 'afford' such a status-giving woman.